MUMBAI: The Reserve Bank of India (RBI) on Tuesday said it will raise Rs80,000 crore by selling 84-day cash management bills (CMB) or short-term sovereign papers to help the government meet its immediate debt obligations.
The auction is scheduled for 28 May and will be settled on T+0 basis on the same day. CMBs will mature on 20 August. "The cash flow mismatch has forced government to raise money through cash management bill to meet their regular expenditure," said Navin Singh, head of trading at ICICI Securities Primary Dealership.
The cash management bills are also used for removing liquidity from the system when it is flush with funds. Currently, banks have as much as Rs7.28 lakh crore worth of excess liquidity parked with the central